1. Consumer Taxation

2. Identify the major types of consumer taxation.
Learning Objectives
Identify the major types of consumer taxation.
Compute gross and net pay.
Complete personal income tax forms.

3. Types of Consumer Taxation

4. Personal Property Tax
Includes things like real estate and motor vehicles
Main tax supporting:
public education
emergency services
local government
Assessed as a percentage of the current value of the property

5. Income Tax
Imposed on earned income by the federal government and by most state & local governments
Amount pays depends on their tax bracket
More money earned = higher percentage paid in taxes

6. Sales Tax
Consumption tax charged at the point of purchase for certain goods & services
In Virginia, sales tax is usually six percent
Sales tax in restaurants may very by county (local government)

7. FICA
Refers to social security and Medicare taxes paid by individuals and employers
Usually 7.65% of the employee’s gross pay
Employer will match with another 7.65%

8. Understanding Your Paycheck

9. When You Get Paid… Gross Pay: wages & salary
Deductions : federal taxes, state taxes, FICA, and other optional deductions
Optional deductions include things like health insurance, retirement, etc.
Net Pay: take-home pay
Calculated by subtracting deductions from gross pay

10. Income Forms

11. Form W-4 Completed every time you start a new job
Determines how much you will pay in taxes each paycheck
If you claim zero, the highest amount of taxes will be withheld from your paycheck.

12. Form W-2
Federal tax form issued by employers that states how much an employee was paid in a given year
Real World Business
Chicago, IL 60640
Irma Money
2301 South Jackson
16,680.24
1,728.00
241.92 IL
440.40 D

13. Forms for Filing Taxes

14. Use this form if… 1040 EZ Income is less than $100,000
Filing as single or married
Under age of 65
No dependents

15. Used to report taxable income, such as:
1099
Used to report taxable income, such as:
Interest
Dividends
Stock sales

16. Ways to File Your Taxes

17. Filing Your Tax Return
In the past, you would prepare your taxes and send your complete package in to the Internal Revenue Service (IRS).
Most people now use TurboTax to prepare their taxes and then e-file online with the IRS.
TurboTax video: lNfvz7Q

18. Activity
Let’s do our taxes!